STATEMENT OF POLICY ON REGISTRATION UNDER THE SALE OF CHECKS ACT FOR ENTITIES WHO'S ONLY
BUSINESS WITHIN THIS STATE IS THE COLLECTION AND SUBMISSION OF MONEY TO A GOVERNMENTAL OR QUASI-GOVERNMENTAL
ENTITY

The Alabama Securities Commission (the “Commission”) has received numerous interpretive opinion requests regarding the requirement for
registration under the Sale of Checks Act, Ala. Code 1975, § 8-7-1, et. seq. (the “Act”) by entities (“entities”) which contract for collection services
with the State of Alabama or a political subdivision thereof, including quasi-governmental organizations created to fulfill a specific governmental
interest (“state”). Specifically, these contracts provide that the entity will collect money from various persons, relating to some financial obligation
associated with such governmental organization, and transmit such money collected, for a fee, to the governmental organization in question.
The Commission has generally interpreted the Act to require the registration of such entities under these circumstances. Effective immediately
and for the reasons set forth below, this policy will replace previous interpretive guidance as it relates to entities which meet the specific guidelines
enumerated herein.

“No person, as a service or for a fee or other consideration, shall engage in the business of selling,
issuing, or otherwise dispensing checks or receiving money as agent for obligors for the purpose of paying such obligor’s bills, invoices, or accounts
without first obtaining a license from the commission pursuant to the provisions of this chapter.”

Further, a “check” is defined to include “[a]ny check, draft, money order, or other instrument for the transmission of money.” For the purposes of the Act,
it is clear that a check would include any instrument used to transfer or transmit money, to include: personal checks, money orders, wire transfers,
ACH deposits and the plethora of products which have evolved for the electronic transfer of money, such as crypto-currencies, since the
implementation of the Act in 1961. Likewise, a strict reading of the act would require the registration of any person, or legal entity, who receives
money from another and then transfers that money, as a service, to a third party. Such persons would be subject to the Act, under current
interpretation, regardless of the identity of the third party transferee and whether or not such entity was governmental in nature or a direct party to
any contract under which the service was to be provided.

Pursuant to section 8-7-4(a)(3,) persons who receive money as an agent for obligors for the purpose of paying such obligors’ bills, invoices,
or accounts with the State of Alabama or any municipal corporation, county, or other political subdivision of this state are exempt from the
requirements of registration. As described above, certain entities have contracted with the state for the right to receive and process payments
from third parties. Many of the entities entering into these contractual relationships for money transmittal services with the state are doing business
in this state exclusively for the purpose of submitting payment to the state and maintain no other business relationships in this state other than
those created for the purpose of executing such transfers. It has been the position of the Commission that, while a contract between the state
and the transmitter may exist, the obligor, the entity for which protection is contemplated under the Act, is the third party submitting payment to the
state and is normally the entity which pays any fees associated with the transaction. Moreover, the risk carried in the transaction normally resides
with the obligor, in the sense that should such payment fail to be forwarded to the state or not credited to the account of the obligor at that entity,
the obligor will not be considered to have met the financial obligation for which payment was submitted. When the state enters into money
transmittal arrangements, it is generally aware of the risks associated with such activities and structure the contracts in a manner which is sufficient
to protect the third party obligor interests.

In review of the Commission policy, the Commission staff has determined registration under the act for third party obligors forwarding payment
to the state pursuant to a binding contractual obligation does not significantly increase consumer protection, provided the money transmitter is
subject to certain contractual obligations which serve to protect consumers and provide a level of transparency in the transactions. A review of
Commission enforcement records revealed no investigations or complaints associated with the referenced business activities and a review of
registration policies of other states indicates that such entities are generally exempt from registration. Therefore, if a money transmitter meets the
following requirements, they shall not be required to register under the act.

The transmitter must have entered into a binding contract with a governmental entity, or entities, to
provide money transmittal services for third party obligors.

The transmitter’s only clients in this state, other than third party obligors, are governmental entities
with whom the transmitter has entered into a binding contract for the transmittal of money on behalf of such third party obligors.

The transmitter will file notice with the Commission that the transmitter will be entering into a contract
identifying the governmental entities for which the transmitter will provide remittance services.

The transmitter will have an independent audit performed on a yearly basis which will be made available to
the Commission upon request. The transmitter will immediately notify the Commission staff if any financial or other condition arises which would
compromise the transmitter’s ability to perform the services for which the transmitter has contracted with the Governmental agency.

The transmitter will enter into an agreement with the Commission which will allow the Commission to
examine the transmitter’s books and records relating to the transmitter’s activities in this state upon written request of the Commission staff.

The transmitter will maintain a segregated account or accounts for the deposit and transmittal of third-party
payments. At no time will any money, less fees charged for transmittal services, submitted for transmittal by a third-party obligor, be comingled with
operating capital or placed in any account not specifically designated as funds for transmittal.

Any money transmitter who meets the foregoing requirements may operate within the state of Alabama without licensure under the Sale of
Checks Act once proper notice is filed with the Commission staff.